CIO Market Update Audiocast Series​

Chris Hyzy:                Thanks, everyone, for joining this week’s Street Talk Call for September 29^th. If I had to think of a few words to describe the most recent market action - and I would even go as far as saying financial action if you consider what's been going on around the globe - it would be a few. It seems like the path of least resistance is down if you had to come up with a statement, but if you had to come up with one word, I would say outliers. The reason is many fold and we'll get into that in just a minute, but I first want to start off with from the top - the cycle. One of the reasons why there are so many outliers literally in this one year alone, in these nine months of 2022, has everything in my opinion - or at least a lot - to do with how where we came from. This is not a normal cycle. Normal cycles do not include the size of the expansion of the balance sheet and normal cycles do not include 40-year high inflation. They do not include situations where central banks around the world together are tightening aggressively to un-anchor the high inflation and re-anchor lower inflation. In some cases we've seen this story before, but it didn't come during a pandemic, at least didn't come even after a pandemic. There has been an extraordinary movement in the last two to three years as it relates to this cycle overall. What was built up in the cycle not just from a monetary policy perspective or a fiscal policy perspective, but think of the consumer spending dynamics that occurred, think of the job market, think of everything that has been altered in the last two plus given three years, and even before pre-pandemic we saw societal changes that were impacting how growth was produced or not around the world even in the United States. A lot of that had to do with things like supply chains, real time inventory, shifting to other types of operating efficiencies, and then ultimately we were in limbo as it relates to capex, capital expenditures, trying to increase productivity. There are labor supply issues and the pool of labor continues to be low relative to what is needed out in the corporate marketplace. So, from our perspective in the Chief Investment Office, one of the reasons why there are many head scratching elements day to day, week to week given this retest and reset period has a lot to do with how we got here and the fact that this cycle we call The Post Pandemic Cycle is producing a reset period largely speaking, half - if a little bit more than half - done. We have long said that this reset period is six to nine months. Why is it six to nine months? Because traditionally, reset periods are three to six months as it relates to valuation and then the earnings thereafter and then ultimately, you can tip into a recession or not and that ultimately determines how far earnings goes. This time around there's a lot of debate as to type of recession, mild versus hard, when's it going to happen? What drives us there? Ultimately, how quickly could we pick ourselves back up from that? Markets are extremely volatile right now, and not just in risk assets, but also in bonds. I want to highlight a few things that we've seen recently. First and foremost, six down days in a row before yesterday. A handful of times this has happened since the 1950s. Traditionally, according to Bloomberg data and the data that we've examined, the next 12 months after this has happened has, on average, been positive developments in equities. In other words, a positive performance year, the 12 months after six down days have occurred since the 1950s. That is not a catalyst to all of a sudden warm up to being overweight equities in our opinion, but it's certainly something to point to as to sentiment. Another thing about sentiment is this - according to the American Association of Individual Investors Weekly Survey, you can argue that we are now sitting on the foot bed of the highest number of bear percentages ever and the difference between bulls and bears has dropped down to a next low that we saw back in the first quarter of 2009. So, sentiment is very, very poor. Even if you look at technicals on a shorter-term basis, you're also witnessing that but again, these are not tailwinds all of a sudden or catalyst to turn the market. The market needs an oasis. We’ll get into that in a second. As it relates to where we stand right now, we're on guard. We’re defensive. We think there are equal risks to the downside and upside when you're broadly speaking about the markets, and that's because nobody knows the exact bell that's going to ring when the Federal Reserve ultimately says, “We're done.” We can point to a number of gauges, and there's widely sought after gauges out there whether it's inflation, whether it's the bond market, in some cases valuation readings in the equity markets, real yields, the dollar, leading economic indicators, purchasing managers indices. There's a number of indicators that you could point to to ultimately say when are we at the end of the reset period and still looming over all this is whether or not you dip into a harder than expected recession. So, let's start with what we know. Right now, yields have gone from what we would consider to be deeply negative real yields to attractively positive real yields in one of the sharpest, quickest amount of times ever. That magnitude is right at the top of one of our outlier lists. A lot of this has to do with the hawkishness by the Fed and other central banks, but it also has to do with the quick and balance sheet removal that has now begun as it relates to what the Federal Reserve is doing. So overall, if you put that at the top of your list, the magnitude and change of negative real yields to positive real yields. Number two is the strength of the dollar. The dollar relative to the pound is at a record low, Pound Sterling at a record low to the dollar give or take. Same thing with the offshore China’s yuan and the yen relative to the dollar is at a 2.5 decade low. When you get bond market volatility in the magnitude of switch from negative real yields to positive real yields and you get a huge move in what we have witnessed in the two-year yield which tracks the expectations of the Federal Reserve, you can get currency instability and that's what we're using right now, currency instability. We saw that over the last couple of well 48 hours or so. The Bank of England stepped in and what they did was they looked away from inflation instability and they started to think about financial stability. That is a major switch and when you do that, that is a flare gun that goes up to investors around the world that says, “Who is next to do that?” So, we'll talk about that in just a second but the Bank of England, another outlier, stepped in during high inflation and actually bought bonds to stabilize the bond market. A lot of reasons for that, but the biggest change has been that reversal of removing assets from the balance sheet. They had to add them to create stability in the bond market. What is the contagion around that? It's a stronger dollar and it's further real yields in the United States. Let's move over to another outlier. Let's take a look overall at the quick move down in valuations. Not a big outlier, it's a small outlier, but we've gone from you could argue 22 times, in some cases down to about 17 times trailing, and is there more room to go as it relates to down to 16 which is traditionally an average multiple over many decades? In our belief, yes, but having said all that, that would also dovetail with slight drift higher and yields which we also expect. Then at that point, 16 times on a trailing basis, we believe the market gets to what we would say is fair value with the laundry list of concerns that are still out there. That's generally because markets around the turn of the year, at least in our belief or early in the first quarter, we believe investors and markets in general will begin to discount the Fed’s next move and that's where we get into a few things here that I want to mention. Some of the outliers first are an extended war in Ukraine and energy squeeze in Europe, which happens to be a little bit better right now than expected if the winter is not colder than expected. Then another outlier that we haven't mentioned recently is what is going on in the initial public offering market. We haven't seen this dry of an IPO market since the onset really of the 2000s. So overall, two-year yields. Another outlier at 2007 levels 15 years ago and last but not least, what we're now starting to see across the board is what commodities are telling us. This brings me to my next point. What is inflation’s next move? There’s an over focus on every data point. It's one of the reasons why the market is down today on September 29^th and removing some of the large gains that happened yesterday is due to the personal consumption expenditure reading, CPI, and other inflation gauges that are suggesting that perhaps inflation is not coming down. We think differently. We have to think forward. Commodities are way down from not only their peaks or median levels of the year across the board including oil. Gold prices are down. Gold prices in our opinion wouldn't be down as much as they are if inflation wasn't about to come down. Again, real yields went from negative to positive. That is doing its job. The housing market is now turning and going the other way. Yes, some aspects of housing are looking backward and show some robustness, but overall, the level of prices and what we're witnessing for the first time in the rental market in September - rents actually declined. Is this a trend yet? No, but it's a start. So overall, we think in the next three months inflation will show its true colors and start to come down. That brings me to my final point here which has to do overall in combination with valuation. Real yields going positive and the strongest of all – dollars - in our opinion is the fact that the money supply continues to drop. If money supply is dropping and commodities are telling us a particular story, what we need is time. We need to assess the length of time that it takes for inflation to begin to adjust the mindset of the central banks around the world. We believe again, that's around the turn of the year. So, do we have some more downside? We could always have more downside, but what's the upside in terms of the equity markets in the next 12 to 18 months? We think it's at least equal to the next three to six months in the equity markets. If we think out on a tactical basis 12 to 18 months, we think neutral still makes sense. Having said all that, the oasis. Every desert needs an oasis at least from our perspective. What is the oasis as it relates to the financial desert that's hot and dry with blowing winds? From what we believe is the water and vegetation in the oasis is two things when you get down to it. First and foremost, when two year yields peak and when the dollar peaks, the combination of those twin peaks, if you will, ultimately in our opinion, is an oasis that the market needs to suggest that ultimately the Fed pauses and ends their tightening campaign, not necessarily pivoting and going all the way towards easing, but simply pausing. At that point perhaps that pause is equivalent to yesteryears’ lifeline in which the shed put - in other words, the lifeline of trying to stabilize markets was what was needed back then. Simply we ask the question, “What's needed now? Is it simply a Fed pause?” We will know more in time, but our belief is that inflation in the next three months will show more of the colors that we expect, which is to the downside. Ultimately, the question will come is when does the Fed pause? Doesn't mean pivot. Doesn't mean easing. From our perspective, it's when do all these high magnitude increases in interest rates and balance sheet removal begin to bite and begin to bite visibly? As that happens and money supply continues to contract, we believe the market’s discount some subtle downside from here. Therefore, we stay on guard, we stay neutral, and we look for opportunities between now and the end of the first quarter to rebalance portfolios for the long-term investor that can take advantage of better prices. That'll do it for today. Thanks for listening.

Operator:                   Please see important disclosures provided on this page.       

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Chris Hyzy: This is Chris Hyzy, Chief Investment Officer, for the market update for September 26th. Global financial markets have experienced significant downside pressure last week, continuing the trend from late August. Recently however, the downside momentum has gathered speed as central banks around the world led by the Federal Reserve have raised rates together and have expressed a move towards higher rates for longer than expected. In addition, currency volatility has also picked up as the Pound goes to many decade lows and the Yen at about two and a half decade lows versus the dollar. In addition, the equities and bonds selling off. Gold and oil prices have also declined, signaling that investors are moving towards an ultra-defensive tone. We remain on guard with a defensive tone as well. We believe markets are in a reset phase still, trying to price in a higher rates structure, a stronger dollar structure, lower overall economic growth and earnings, and heightened geopolitical risk all at the same time. This takes time and we expect choppy markets and overall action in this regard to last into year end. We emphasize diversification across and within assert allocation and look for opportunities in spades in the next three to six months plus to rebalance portfolios in order to take advantage of the turndown in inflation eventually. The ultimate pause by the fed, which we expect somewhere around year end, and not necessarily pausing overall rates, but at least in terms of their verbiage, we also expect a peak in the dollar early next year and finally, the stabilization in corporate earnings. This rebalancing also includes considering an increase in duration in fixed income portfolios primarily through exposure to long term government bonds. At that point we believe long term investors would benefit from a resumption of the long-term uptrend in the US profit cycle, a move lower in long term bond yields, and equity markets in general. For now, the reset continues, consolidation continues apace across most financial markets including stocks and bonds, currencies, gold, and oil. In the next three to six months we have high conviction that long term

investors will have opportunities to rebalance portfolios in a more meaningful way up in equities if you’re below your tactical targets. For now, we continue to be on guard. Thanks for listening.

Operator: Please see important disclosures provided on this page.

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Chris Hyzy:                Thanks, everyone, for joining this week’s Street Talk call. As we get into the latter part of this year and we get into the tail end of this particular reset cycle without going too far back in the past, but I thought the best way to describe what’s going on right now and a potential couple of changes that we’ve all witnessed in the last two weeks and how to consider certain areas within that spectrum. I thought it was best to provide a quick analogy before we get into today’s discussion. The quick analogy is I had an opportunity to speak with a few investors this past week. We were describing a number of different adventures that people have gone on whether it’s a vacation, whether it’s certain services, whatever it may be. I was told about a particular type of adventure then incorporated a cobra snake and when the hood of a cobra snake turns towards you, you have to think very quickly, and you have to think very nimbly and flexibly and think very fast. Put up a shield is what I was told to protect yourself against when the hood turns towards you and I started thinking about this particular type of cycle we’re in right now and what we heard yesterday from Chair Powell and the FOMC, the Federal Open Market Committee. I started thinking about what has changed? Most people said not much has changed and I’m looking at this a little bit differently and saying quite a bit has changed, so let’s go through that. I also want to go through from the eyes of an investor, how to think about where we are in this environment right now. With all the different pressure points on each and every investor, each and every person out there, how to think about where we are as an investor in this environment in this part of the cycle which we are pretty much a high conviction thought here is that this post pandemic cycle is unlike no other. How to assess how long we will likely be in this particular cycle, point to certain signposts that may signal when it’s ending, and then last but not least, what to consider doing while we are still in this particular pressure point, this reset part, and how can we best prepare as we come out? So, I want to do that at the tail end of the upfront comments and put it in the eyes of a defensive investor or growth investor, a balanced investor, a fully invested investor, and then an investor that is actually accumulating cash and has excess cash and has a long enough time horizon to get through this. So, we’ll do that throughout the next 15 minutes or so. Up front, I do want to address a little bit of some of the signposts that’s going on and how to think about where we are in this cycle.

                                    I think first and foremost, there’s a lot of principles to consider and to write down. First and foremost, this is a post pandemic cycle. Obviously arguably, you can still consider we’re in a pandemic type of societal cycle, but as it relates to investments, we are in a post pandemic cycle that is most relevant to five, six, actually seven decades ago in the post-World War II era, not most equivalent to the ‘70s cycle of hyperinflation and ultra-high interest rates, and then a meandering type of approach to it, and then last but not least, inflation was able to reassert itself over many, many years because it was not dealt with at its outset. Post pandemic cycle now is very much like post-World War II and it was driven by the expansion of the balance sheet. So, let’s start there. The Federal Reserve right now has many tools; much different than it had in other cycles - that’s another different point of this cycle. Federal Reserve is applying forward guidance. You cannot point to any other cycle that had explicit forward guidance like they have today. You could argue they were late with forward guidance. You can argue they were off sides or you could debate that I should say, but what we probably can’t debate is what they’re telling us. What they told us yesterday took it up another notch. They told us that not only are short rates, the Fed funds rate going up another 75 basis points, but they’re going to go up more than we originally expected. They’re likely to go up more into the first quarter and the terminal rate, which started out early on in their forward guidance approach in the mid-threes, is now somewhere in the high fours, 4.6% or so is what they indicated and that means that they are likely to hike into the first quarter of next year. Therefore, if you kind of extrapolate from there, their thinking is they’re willing to risk a recession apparently to be able to break the back of inflation. Now in the past that was a debate. Before yesterday it was on the minds of people that perhaps maybe a soft landing is in the cards or perhaps maybe the Federal Reserve can thread the needle and bring down price instability to price stability and keep the job market robust enough and then bring inflation down. Now what is quite apparent is not only our rates going higher, they told us yesterday that rates are going higher and they’re going to stay there. That’s a very different proposition than what it was before that week, many people were suggesting this should have happened a while back. Many well known economists and former Treasury officials were also suggesting they should have done this quite earlier, and some are still suggesting they should go higher than 4.6%, if not 5% or 6% on the fed fund. I don’t really have an answer on that. From the Chief Investment Office perspective, what we have to do is take the Fed at its word and that’s what we’re going to go on, which is a higher terminal rate now, breaking the back of inflation remains, willing to accept more pain in the economy, if not jobs and consumer spending, to break the back of inflation and that will likely mean two things: Continued tightness in financial conditions and continued strength in the dollar. Those two things in our opinion should drive a good portion of the investment decision making as we go through the latter stages of this reset. This reset, just to put things in perspective, started over all rolling bear markets in the more speculative areas of bear markets, so think of the speculative emerging asset classes that popped up in the last few years, think of those long duration growth stocks that had very little profits, if any profit, and relied on a low discount rate to plow their revenues back into growth enhancing initiatives to create future cash flows. While investors were happy to invest in those areas when rates were really low, now what investor wants is profits now, not profits later therefore the market has shifted from low quality to high quality. We’re going to be in that higher quality realm of outperformance of the market for quite some time, most likely until the Fed says, “We’re done.” That remains. The other part of the spectrum that is something that’s very, very high conviction and visible is the fact that the yield curve is on its way to not just wider inversion between the two and the 10 year treasury yields, but also the fed funds rate is likely to go higher at some point at the tail end of this cycle in the reset cycle than the 10 year treasury yield, and that typically happens at the very end of the cycle. So that is one indication that has yet to happen, but as we get to a terminal rate perhaps as the Fed has indicated a 4.6% or somewhere close to that, the 10 year yield will begin to start to discount much slower growth, start to discount whatever type of recession may or may not come, and that will start to, in our opinion, come down and invert the curve and that generally speaking happens at the tail end of the cycle, and that’s when risk assets begin to start to stabilize and then ultimately  perform better. So, we’ve got a way to go before that. Again, we’ve talked this reset cycle is about a six to nine month reset and we’re about halfway through it right now heading into the latter stages of that at least in our opinion.

                                    The other part that the reset cycle does incur that we’ve talked a lot about is this earnings reset. There are wide ranging forecasts on earnings upwards of 250 for 2023 in the analyst community, down to a low of about 155. At least that’s what we saw recently. That’s a huge, huge range. Almost $100 range in the S&P 500’s earnings for next year. B of A Global Research is carrying $200 off of a base coming out of this year of about $218 to $222. That is about an 8% decline. That would be lower than your typical recessionary times and lower from our perspective because of the health of the balance sheet of the current consumer right now, which is very different than prior so called recessionary type cycles where the consumer had the debt and the corporation had the debt. Right now the governments have the debt. At the same time, you’ve got central banks around the world all hiking together and hiking more aggressively than any modern day hiking cycle that we’ve seen except for the Bank of Japan, but the Bank of Japan came in literally in the last 24 hours and began to very assertively protect the yen from continuous weakness which we have seen for almost a two and a half to three decade low in the yen versus the dollar. So, there’s a lot of central bank coordination going on. Financial conditions should get tighter, not looser and that ultimately means first and foremost, that the dollar should continue, in our opinion, its strengthening phase. That tends to hurt areas like the emerging markets, it tends to pressure those areas and ultimately, it tends to pressure lower quality areas, particularly those areas that have high dollar liabilities. Simply put, they got to put more of their local currency up to pay down a dollar debt and that ultimately harms their local economy and generally speaking, they need assistance when that starts to happen. So, we’re still in the throes of difficult times. The Fed told us they’re going to stay higher for longer and that is a key change from what they’ve told us recently where the market was expecting rate cuts to be to be pulled forward in ‘23. Now, it looks like the market is suggesting it’s later in ’23, if not ’24. That’s a big change from our perspective. So that means a few things and we’ll address that from an investor’s perspective in just a second.

                                    Earnings picture - we mentioned at the absolute level what it’s likely to be at least in B of A Global Research forecasting an 8% decline for next year. We think the picture now with a higher terminal rate, perhaps slower growth, and perhaps a stronger dollar than expected - it could actually be a little bit more of a decline. We’ll see how the third and fourth quarter goes to give us a trend feel for next year, but we are witnessing the fact that in the United States there are more negative revisions to earnings than positive. That continues the trend that the quantitative analysis/global quant team at B of A Global Research has indicated since the beginning of the year, and that continues across the globe. This is widely expected and the question will be is, “How far do these revisions go?” In our estimation again, we should see some stabilization at the beginning of next year but expect more negative earnings revisions as we close out this year.

                                    Last but not least, one interesting data point just from data’s perspective is concerned. The Nasdaq-100 Index multiple right now is below the 10 year average. That’s a very good sign. It doesn’t mean that money flows coming in and ultimately going to start to accumulate the companies within that index or accumulate that index. What it simply means is value reset is basically in its ending stages at least in our opinion. When your long-term growth stocks begin to price in some of the more pressured scenarios, that’s a good sign for those long term investors between now and the first quarter of next year as a good starting point multiple times to come in and start to re-accumulate some of these areas that have fallen below their 10 year valuation levels. That is down about 35% from its peak, which is right in line with many of the other times in history that have had similar types of recessionary indications of this cycle.

                                    The other thing we’re watching is the leading indicators. Just to put the two most important leading indicators in our opinion, is the yield curve. We talked about that a little bit. The two is, the 10 year spread in the yield curve, the inversion right now is the largest since 1982 when interest rates were up towards 15%, so there’s a lot of things that we can point to that we’re getting to the tail end of this. The major difference, at least in our opinion this time, is that the Federal Reserve was late initially and is now playing significant catch up and is being very defensive and being very assertive both in communication, forward guidance, and actual action. When all those things converge together, this is our viewpoint.

                                    So, let’s talk about the eyes of an investor and how to think about where we are at. We’re in the later stages of the cycle; a little bit past the midpoint. It is our opinion that the reset cycle is a six to nine month reset cycle where you have rolling cyclical bear markets before you reassert back into the secular bull. You need earnings and profits to stabilize at the end of this. You need to see the 10-year yield begin to come down and the fed funds the 10-year yield to invert. Valuations are stabilizing right now. Then ultimately the last shoe, at least in that step-by-step function, is the fact that the Fed says we’re about to be done and then we’re done. That will likely put a lid on the dollar strength. It may not weaken the dollar initially, but certainly stop the ultra-strengthening. That’ll start to ease some of the pressure on the riskier areas of the world, if not of the equity markets, will point to signs like credit spreads in high yield, will point to signs like investment grade credit spreads in general. Funding stress – we’re not seeing it right now, but if it should pop up in a concerning way, that should limit itself as well and we’ve got some steps to take before that. Purchasing managers indexes around the world are still suggesting that things are getting weaker. We need those to stabilize. These are all signposts to assess the end point or at least the ending in the bottoming process of the reset cycle. We’ll see a lot more of this towards the end of the year than what we’re seeing right now.

                                    What do we do between now and then? Let’s take a defensive investor first. A defensive investor who typically has more fixed income than any other asset class - it tends to be folks either at or close to retirement. It tends to be those areas that are looking to protect wealth. From our standpoint generally speaking, even though it is our view that rates in the government bond market will likely drift higher from here, it is time to consider lengthening duration whether it’s in the municipal market or the treasury market. This is the point in the cycle where you get a little bit more drift upwards in yield as taking [Q]overall from what the Fed’s suggestion is, but then the [Q] starts to change and goes towards what the economy is telling us and ultimately those yields cap, they start to come down as growth slows, and if growth slows a lot harder than the conventional wisdom out there, those yields are likely to come down even further than expected and start to match the trend that we expect in inflation which is lower and sharply lower by the end of the year. Therefore, extending duration at this point in our opinion makes sense for the more defensive investor that is overly allocated to a shorter duration.

                                    The growth investor. The growth investor, generally speaking, has a longer, much longer time horizon, many cases 10, 15, 20+ years. They tend to be a constant investor over the course of time, so investing over time versus at a point in time. That growth investor should start to see many opportunities. We’ve already mentioned that the Nasdaq 100 is now 35% below their valuation peak and below their 10-year average. Over the course of the next six to nine months we expect opportunities to develop in some of the larger technology areas, some of the larger healthcare areas. As growth begins to stabilize at a lower level and stay down at that level while the Federal Reserve continues to keep rates at a higher than expected level, growth will be tougher to find and when growth is tougher to find, that’s when some opportunities develop in some of the growth areas of the equity market. So, I would be looking for plans to be built now over time as a growth investor to look at some of those sectors out there that are exhibiting stabilization in profits as we hit the turn of the year and then ultimately, higher growth than the overall market at a good valuation, not at valuations that are based upon new acronyms like total addressable market or other things in which cash flow is way out in the future. We want to look for areas that are providing us good profits now and ultimately have exhibited really good valuations because the market has been under pressure.

                                    In terms of the balanced investor. The balanced investor tends to be fully invested; well diversified. This is the type of year that is extremely difficult where the bond market and the stock market, which typically have low correlations against each other, if not at times negative, are acting together in a downward fashion. This is one of the most difficult years in five, six, seven decades collectively. Some call it a perfect storm. Others suggest one of the most difficult years they’ve ever seen in investing. From our perspective, diversification at this point in time of the cycle coming out into next year, this is the point in the cycle where longer dated fixed income areas as yields start to turn and go back down the other way begin to provide that diversification, that hedge on risk assets like they typically do and therefore we would not abandon the long, time tested principle of diversification and balanced. As we come out of this reset period and we start to grow and things reset themselves and the profit cycle starts to reset itself and go north again and the Federal Reserve ends and breaks the back of inflation and ultimately says we’re done, the diversified investor, albeit may not perform as well as the most risky areas of the market, but certainly being diversified going in and diversified coming out helps compound returns over time, and that’s what we continue to stick to for the balanced investor. As cash comes into the portfolio in the next six months, if there’s consistent flow coming in, we would look for opportunities that have over corrected.

                                    In terms of the fully invested investor, it’s the same thing as the balanced investor - having that view on diversification, high quality, looking for opportunities across equities and fixed income, and also some of the reflationary areas that in our estimation are still under supply and accelerated demand over the next 10 years. The energy infrastructure area, infrastructure in general, the beneficiaries of the Inflation Reduction Act, and last, but not least, real estate that gets over corrected at times could potentially occur in this cycle.

                                    Finally, the investor that has excess cash. This is the investor that’s looking for opportunities right now and from our perspective, over time – invest over time. Look for opportunities starting right now given the significant correction that we have gone through in the last few weeks. This is our second or third big one of the year coming off of the lows that we saw in June. This is the first big one off of the lows we’ve seen in June at 3666 in the S&P 500, trailing, going all the way up above 4300 or so on August 20^th, and then coming back down to where we are right now and retracing those gains that were made between July, mid-June, and August and now we’re on that second attempt. In that second attempt generally there’s two to three attempts in cyclical bear markets. So, for the long-term investor with excess cash that’s below their equity benchmarks, we will look for opportunities over the course of the next six to nine months two to three different opportunities as the fed cycle continues to come back into the markets and raise actually allocations to equities if you’re under your long-term equity benchmark. For those that are already there, more defense is needed, more balance is needed, more diversification continues to be needed to get through this full reset period.

                                    So that’ll do it for today. Thanks for listening.

Operator:                   Please see important disclosures provided on this page.

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